Mannkind and the Warrants of Blood (MNKD)

Poor Mannkind (MNKD). The lamest endocrinology company in existence just did a deal so awful it rivals the infamous Repros 99.6% Discounted Warrant deal from 2011. Read about that stinker here.

Tonight, the 9th of May 2016, with the shares closing at $1.32, the morons at Mannkind announced a unit offering at $1.03 per unit. Says the company:

Each share of common stock is being sold together with a warrant to purchase 0.75 of a share of common stock (A Warrants) and a warrant to purchase 0.25 of a share of common stock (B Warrants) for a combined purchase price of $1.03. Each unit consists of one share of common stock. 3/4 of a Series A warrant, and 1/4 of a Series B warrant.

Both warrants are struck at $1.50

The Series A warrants expire in 2 years, and have typical American-style exercise rules. The Series B warrants expire in December 2018. The B warrants have a variation of a European-style exercise rule.

So what is this prize package worth to the buyers?

A share of stock is worth $1.32 at last close.

The Series A Warrants are worth, according to Bloomberg:

MNKD-SeriesA

$0.93 each, and 0.75 x 93c = 69.75c

The Series B Warrants are worth, according to Bloomberg:

MNKD-SeriesB

$1.03 each, and 0.25 x 1.03 = 25.75c

Thus the entire package, sold to investors this evening at $1.03 is actually worth:

1.32 (stock)

+.6975 (Series A Warrant)

+.2575 (Series B Warrant)

= $2.275

giving the lucky buyers an immediate paper profit of 120%, and giving existing MNKD bagholders incredible dilution.

The content contained in this blog represents only the opinions of the author. The author may hold either long or short positions in securities of various companies discussed in the blog. This commentary in no way constitutes investment advice, and should never be relied on in making an investment decision, ever. This blog is not a solicitation of business: all inquiries will be ignored. The content herein is intended solely for the entertainment of the reader, and the author.
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3 comments

  1. You are a complete Moran. Got your math all wrong. What a bafoon. Ex goldman Jay?

    [Yes, a complete bafoon Moran. Numbers are as of the close on 9th of May, from Bloomberg. You do have a Bloomberg, right big fella? – Editor]

  2. hello buyersstrike,

     

    some news on Platinum Montaur/Mark Nordlicht (ECHO Therapeutics/former Sontra and/or Neoprobe/Navidea):  

    http://www.reuters.com/investigates/special-report/usa-hedgefunds-platinum/

       

    Gesendet: Dienstag, 10. Mai 2016 um 01:38 Uhr Von: BuyersStrike! <comment-reply@wordpress.com> An: wolfgang.hanickel@web.de Betreff: [New post] Mannkind and the Warrants of Blood (MNKD)

    buyersstrike posted: "Poor Mannkind (MNKD). The lamest endocrinology company in existence just did a deal so awful it rivals the infamous Repros 99.6% Discounted Warrant deal from 2011. Read about that stinker here. Tonight, the 9th of May 2016, with the shares closing at $1."

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